Post navigation

A Slap-Down to Libertarian Thinking in Health Care

On Sept. 14, the United States District Court for the Eastern District of Virginia delivered a slap-down to a case challenging Virginia’s Certificate of Public Need (COPN) law, dismissing the case on all four of the constitutional theories raised in the case.

In Colon Health Centers of America v. Hazel (Subscription required), two health care providers who wanted to offer imaging services in Virginia challenged Virginia’s COPN law, claiming it violates the Privileges or Immunities, Due Process, and Equal Protection Clauses of the Fourteenth Amendment, as well as the Dormant Commerce Clause. The plaintiffs apparently sought to turn back the clock on judicial interpretations of these provisions at least 75 years, to the time when substantive due process reigned and the market was the unfettered king of commerce (think Lochner v. New York), and courts second-guessed legislatures on economic and social policy, The plaintiffs even acknowledged in their briefing on the motion to dismiss that their challenge under the Privileges or Immunities Clause was not in accordance with settled law, which has held since 1873 (in The Slaughter-House Cases) that the right to earn a living unburdened by state police power legislation is not one of the privileges or immunities guaranteed by the Fourteenth Amendment. They simply wanted to preserve the issue for appeal.

The court, predictably and in accordance with well-settled precedent, dismissed all of these claims. But one of the interesting things that appears in the decision is the reiteration of the standard justification for Certificate of Need (CON) programs, which currently exist in 36 states. The court states that CON programs “correct the market” for expensive health-care services. We generally acknowledge that there is a need to “correct the market” in health-care through the retention of CON laws in most states by the legislatures. Yet the majority of the United States Supreme Court looked upon this idea with great suspicion in the Affordable Care Act case; failing to buy the argument that the health-care and health-insurance markets were tied together (or were a single market) and that there were major distortions in the national market that could be corrected via economic legislation under the Commerce Clause. Why the difference? Are we heading for another era where the courts impose a particular economic view of the world on elected representatives?

I’m sure that the plaintiffs in Colon, and their well-heeled supporters, with an eye to the ACA decision, will work their way up the court system not only for their Privileges or Immunities argument, but for all of their libertarian economic arguments, in the hope of getting a sympathetic hearing at the United States Supreme Court. Either the market is distorted, and needs correction, or it is not. It will be interesting to see how these theories play out as they work their way up the judicial food chain. Everything old is new again, indeed!